South African vehicle sales hit 17-year high in 2025

South Africa’s new vehicle market closed 2025 on a high, pushing past pre-pandemic volumes and delivering its strongest annual performance in more than a decade. 

After several years of suppressed demand, the recovery gathered pace through the second half of the year and culminated in total industry sales of 596,818 vehicles – a 15.7% improvement over 2024 and the highest annual total since 2008.

According to data released by The National Association of Automobile Manufacturers of South Africa (NAAMSA) the rebound was driven by a combination of easing financial pressure on consumers and a far broader selection of competitively priced vehicles. A cumulative 150-basis-point cut in interest rates since September 2024, record-low vehicle inflation of 1.5%, lower fuel prices and improved credit availability all played a role in restoring buyer confidence. 

Added to this was the liquidity injection from the two-pot retirement system, which unlocked discretionary spending for many households.

December sales

Industry sales reached 48,983 units for the month, up from 41,101 vehicles the previous year. Passenger car sales grew by 20.3% year-on-year, while light commercial vehicles increased by 23.7%, reflecting renewed demand from both private buyers and small businesses. 

In contrast, the commercial transport sector ended the year under pressure, with medium commercial vehicles down 7.0% and heavy trucks and buses declining 13.2% compared to December 2024.

Retail demand remained the backbone of the recovery. Dealer sales accounted for 90.8% of December volumes, underlining a return to showroom-driven activity rather than fleet-led distortions. Rental companies absorbed 6.3% of sales, government 1.9% and corporate fleets 1.0%, broadly in line with a more normalised market structure.

Standout performer

Annual car sales climbed 20.1% to 422,292 units, marking the strongest retail recovery since the Covid-19 disruption. Light commercial vehicles also posted growth, increasing 7.8% to 143,637 units, supported by improving business confidence and replacement demand. Medium commercial vehicles rose 5.6% to 8,151 units, while heavy trucks and buses declined 3.0% to 22,738 units, reflecting softer freight and infrastructure activity late in the year.

Here’s why

Several structural shifts underpinned the 2025 growth. Improved liquidity and lower borrowing costs led to a revival in vehicle finance approvals, while pent-up demand from consumers who delayed purchases between 2021 and 2024 came through strongly as affordability improved. 

The market also continued its gradual transition towards new-energy vehicles, with year-to-date NEV sales by November exceeding the full-year total achieved in 2024.

Another defining feature of 2025 was the influx of more affordable imported models, particularly from China and India. These vehicles intensified competition, placed pricing pressure on established players and expanded choice at the lower end of the market. 

While this challenged domestic manufacturers, it played a significant role in stimulating overall demand and accelerating replacement cycles among cost-conscious buyers.

Macro-economic data reinforced the recovery narrative. 

Spending on durable goods recorded its strongest quarterly growth of the year in the third quarter of 2025, rising 3.4% quarter-on-quarter. However, the stronger appetite for vehicles also lifted imports, resulting in net exports detracting 0.4 percentage points from GDP growth as imports rose 2.2% in the same period.

Exports

On the export front, 2025 was a mixed but ultimately positive year. Total vehicle exports reached 408,224 units, up 4.4% from 2024 and surpassing the 400,000-unit mark for the first time. Passenger car exports declined 8.0% to 252,601 units, while light commercial vehicle exports surged 33.3% to 153,855 units. Truck and bus exports, though small, increased sharply to 1,768 units.

Export prospects remain closely tied to global regulatory and geopolitical developments. In Europe, a softening of the 2035 emissions deadline to a 90% CO2 reduction rather than a full ban provides limited breathing room for manufacturers, but does not alter the long-term shift toward clean mobility. 

Trade uncertainty with the United States also remains a risk, particularly around AGOA access, given the industry’s exposure to export markets.

The year ahead

Looking ahead, the outlook for 2026 remains cautiously optimistic. With inflation expected to average around 3.3% and interest-rate relief still filtering through to household budgets, disposable income is likely to improve further. The South African Reserve Bank’s GDP growth forecast of between 1.4% and 1.6% for 2026, supported by ongoing reforms in energy and logistics, provides a relatively stable backdrop.

Industry expectations point to new-vehicle sales growth of between 9% and 11% in 2026, driven by continued affordability, competitive pricing and a steady flow of new products. 

As Brandon Cohen, chairperson of the National Automobile Dealers’ Association, noted, the key driver remains dealer-level demand, with “early indicators suggesting that the positive momentum in the new vehicle market is likely to carry into 2026.”

After years of volatility, 2025 marked a decisive return to form for South Africa’s automotive market. Whether that momentum can be sustained will depend on economic stability, policy certainty and the industry’s ability to remain competitive in an increasingly price-sensitive and globally exposed environment.